State leaders urged to raise money for roads, transit

Michael Dresser, The Baltimore Sun

Business leaders and county officials are urging the governor and General Assembly to increase Maryland's gas tax or find another way to raise hundreds of millions of dollars for road and transit projects — even in the face of public opposition.

More than 100 people packed a hearing room in Annapolis on Wednesday to discuss strategies. They want to persuade legislators to raise the money needed to develop major new transportation projects, not just maintain what the state already has.

Prince George's County Executive Rushern L. Baker III said the General Assembly needs to act in the legislative session that begins next month, not "kick the can down the road."

Some participants in Wednesday's Transportation Funding Summit contend that Gov. Martin O'Malley needs to make a more sustained, hands-on push for a tax on gasoline than he did last year. Others argue that he needs instead to come up with an alternate, "outside-the-box" approach to raising money, in which the gas tax is a smaller part of the solution.

So far, the O'Malley administration has been mum on its plans. Spokeswoman Raquel Guillory said the governor and his staff are still formulating his legislative program.

House Speaker Michael E. Busch, an Anne Arundel County Democrat, says officials need to see what happens in the federal negotiation over the "fiscal cliff" before deciding what can be done in Maryland. Senate President Thomas V. Mike Miller says he's willing to make a new push for revenue, but it will require the governor's direct involvement in rounding up votes.

"It's a tough sell, and we need to see everyone pulling an oar," said Miller, a Calvert County Democrat.

Maryland's traditional revenue sources for transportation — among them titling taxes, registration fees and the 23.5-cents-a-gallon gas tax — are no longer producing enough money to build new highway or transit projects needed to relieve congestion, according to the nonpartisan state Department of Legislative Services.

By 2018, analysts project, the entire Department of Transportation capital spending program for highways will be used for "system preservation" — that is, repair of current roadways, with nothing left over for design and construction of new projects.

And that doesn't take into account the projected costs of building three major transit systems currently planned: Baltimore's Red Line, the Washington suburbs' Purple Line and Montgomery County's Corridor City Transitway. With application deadlines for federal funds to build the Red and Purple lines as early as next year, Maryland has yet to identify a source of funds for the state's share — more than $1 billion for each project.

Meanwhile, road projects all over the state are taking a hit as the costs of transit systems chew up more of the state's transportation dollars. During the past budget year, spending on mass transit — mostly for basic operations – took up 48 percent of the budget, compared with 23 percent for roads. Just five years before, spending on the two categories was roughly even.

The sickly condition of the state's Transportation Trust Fund is old news in Annapolis. Before the 2011 session, a blue-ribbon commission advised the General Assembly that Maryland needed about $850 million a year in additional revenue and recommended a series of revenue-raisers, including a 15-cents-a-gallon increase in the gas tax. Lawmakers said no.

Early this year, O'Malley proposed a 6 percent sales tax on gasoline that would have added about 18 cents to the price of a gallon of gas and raised about $613 million a year. The measure didn't even get a committee vote, as distracted legislators wrangled with several higher-profile issues — same-sex marriage, casino gambling and an income tax increase.

Many lawmakers say there is little chance the result would be different if the governor were to return in January with a variation of either of the gas tax proposals. The resistance from their constituents is just too strong, they say.

Del. James E. Malone Jr., who represents Baltimore and Howard counties, shows how difficult passage of a transportation revenue package would be. He's a Democrat, vice chairman of the subcommittee that oversees transportation policy and a self-described "big transit guy." But he took a constituent survey last year and found his voters were "adamantly opposed to the gas tax." He says his "gut feeling" is that their minds haven't changed. The votes needed in the Assembly to pass a tax increase won't be there, he says.

House Majority Leader Kumar P. Barve, a Montgomery County Democrat who supports increased transportation spending, said he's doubtful that substantial new revenue can be raised. The best legislators may be able to do, he said, is hope that an improving economy produces enough new income tax revenue to yield a surplus, then use some of that money for transportation.

Sen. David R. Brinkley, a Frederick County Republican, said one obstacle to new transportation revenue is that taxpayers suspect the money will be diverted to general budget purposes — as it has been in the past under governors of both parties. He said the public won't be willing to support such measures "unless trust is restored to the Transportation Trust Fund."

One problem facing transportation advocates is that other conventional revenue streams for such projects have been tapped more recently than the gas tax, which was last increased in 1992 and which has lost much of its buying power. Under Republican Gov. Robert L. Ehrlich Jr., the legislature nearly doubled the registration fee. O'Malley increased the titling tax in 2007. Neither is as effective at raising revenue as the gas tax.

The difficulty of selling increases in any of the usual revenue sources for transportation has prompted some advocates to call for alternative approaches, including unconventional financing, public-private partnerships or regional transportation authorities.

Kathy Snyder, president of the Maryland Chamber of Commerce, restated her business group's decade-long support of a gas tax increase but said other new approaches may be needed as well.

"We have to find a new way of dealing with these projects. The gas tax is not going to cut it," she said.

"It may be we need a different model. It may be a gas tax, it may not be the gas tax," Howard County Executive Ken Ulman told the summit. One possibility, he said, is that the state may have to set up regional authorities with different levels of taxation.

Ulman, a Democrat, said it may require more than lobbying the legislature to win passage of a transportation revenue bill. He said parties with an interest in transportation projects — including developers, road builders and mass-transit-supporting environmentalists — might have to raise money and mount a public ad campaign to call attention to the state's transportation needs.

The Howard executive, considered a potential candidate for governor in 2014, pointed to the success of the recent campaign for approval of gambling expansion in Maryland.